Sorry, you have not enabled Javascript for your internet browser, so some of our website's pages may not render as fully as intended.Please Click here for easy instructions on how to enable Javascript on your browser or consult your IT support staff for help.

Keep up to date with a free subscription, courtesy of HSBC

Moutai, motorways and mountains

A year ago (see WiC346) I wrote about China’s shift from imitation to innovation and mentioned that I was keen to visit Guizhou and see some of the acclaimed new highway bridges that account for over half of the world’s top 100 bridges (by height). I recently fulfilled that wish and gained some first-hand knowledge about the pace of development in a region commonly regarded as a backwater in China.

Situated in the southwest, Guizhou is an inland province that has long been considered poor and backward due to its remote location and hilly topography. It’s home to many ethnic minorities and its per capita GDP has consistently ranked towards the bottom of national rankings. An old saying best describes how harsh life could be there: “Not three feet of flat land, not three days without rain, and not a family with three silver coins.”

What surprised me during my trip is that today’s Guizhou seemed neither poor nor backward. On the contrary, the Guanshanhu New Zone in the provincial capital Guiyang appears as modern as Shanghai and Shenzhen, with wide boulevards, lush green belts, shiny skyscrapers and a park that is bigger than New York’s Central Park. On a normal Tuesday night, the bar on top of the Renaissance Hotel was abuzz with 20-somethings, hanging out with friends and playing with their smartphones, and ordering expensive wine and cocktails. One young man told me that although the average income is lower than in neighbouring Sichuan province, the cost of living in Guiyang is actually higher. Throughout the trip I heard locals use the word “jixing 畸形” (which means deformed or abnormal) to describe Guiyang’s strange imbalance – lower incomes and higher prices – yet nobody seemed able to explain why.

After three days and two side trips to Maotai Town (in the north) and Zhenyuan (in the east), I suspect I have the answer – the “imbalance” is largely due to a massive development scheme sponsored by the central government. Vast funds have been spent on infrastructure – and since they’re funnelled through the provincial capital it ensures that a proportion of the economic value is ‘captured’ in Guiyang even when projects are being built in other parts of Guizhou. All that cash – some of it of the grey variety – is a key reason that prices have been driven up in Guiyang’s local economy.

Even if there is ‘leakage’, my own feeling is that the government’s plan – call it “wealth redistribution” from the richer coasts to poorer inland areas – has led to dramatic improvements in the province’s infrastructure and, in turn, the broader economy. While travelling on the new roads – some of which cut through misty mountains – I was amazed by both the natural scenery and the colossal feats of engineering that went into these man-made highways. I was told by my local driver that over 60% of Guizhou’s new highways consist of bridges and tunnels and each kilometre costs more than Rmb100 million to build. Perhaps that also explains the high tolls relative to other regions.

Until quite recently, Guizhou was best-known nationwide for two products: Moutai baijiu (see WiC378), the fierce, mouth-burning liquor consumed at lavish banquets, and Laoganma chilli sauce (see WiC143), a household staple created by an illiterate noodle stall owner in the 1990s. But today the province is refashioning itself as one of China’s new economic frontiers with Big Data and tourism as two of its pillar industries. Guiyang set up China’s first Big Data Pilot Zone in 2014, and the city has since welcomed Alibaba, Huawei, Tencent and Baidu, as well as Apple, Qualcomm, IBM, Microsoft and Dell. These firms have concentrated their cloud storage data centres there (see WiC375). Tourism also shot up with millions of middle-class Chinese flocking to the region for its beautiful scenery, exotic ethnic minority culture and well-preserved ancient towns like Zhenyuan 镇远. I myself was delighted to discover that the 2000-year-old river town has largely kept its authentic architecture and cultural flavour, and there was even a section of another Ming Dynasty Great Wall atop the hills behind the town (see photo).

One factor that might have contributed to the central government’s financial support for the region is that several senior Communist Party figures worked in Guizhou before taking on national leadership roles. Xi Jinping’s predecessor Hu Jintao, newly elected Politburo Standing Committee member Li Zhanshu and Xi’s protégé Chen Min’er (now Chongqing Party Secretary) have all served as Party Secretaries there. And perhaps it’s also telling that Xi chose to become a delegate for Guizhou at the recent 19th Party Congress, showing his favourable view of the province.

A native Chinese who grew up in northeastern China, Mei attended an elite university in Beijing in the late 1980s and graduate school in the US in the early 1990s. Over two decades she has worked in the US, Hong Kong and mainland China, both in the media and with two global investment banks, where she has honed her bicultural perspective. If you’d like to ask her a question, send her an email at askmei@weekinchina.com

The Week in China website and the weekly magazine publications are owned
and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is
involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these
publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will
therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.